Report 71 Business Practices Committee7. Conclusion and Recommendation |
The contracts entered into by consumers with Leisure Club were to their extreme disadvantage. Leisure Club was an inappropriate vehicle for these types of agreements. The accounting, management and administrative practices of Leisure Club were insufficient. No grounds justifying the practices in the public interest have been found.
The Committee finds that the business practices of Maharaj and Leisure Club constitute harmful business practices. It has been shown that the parties were not able to manage a pooling system. If the parties were to be allowed to operate a similar scheme, it is likely that an unsuspecting public would be exposed to further losses.
It is accordingly recommended that the Minister--
| a) | under section 12(1)(b) of the Act declares unlawful the business practice whereby JCS Development (Pty) Ltd, trading as Leisure Club and Bishum Dwarika Maharaj administer or manage a pooling scheme, that is, a scheme whereby-- |
| i) | the parties, or any business in which the parties have any interest, acquire or offer to acquire, either on their own or its behalf or on behalf of a third party, any right to or interest in the exclusive use or occupation, during determined or determinable periods during any year, of accommodation; and |
| ii) | the parties, or any business in which the parties have any interest, confer or purport to confer on any person any right to or interest in the exclusive use or occupation, during determined or determinable periods during any year, of accommodation; |
| b) | under section 12 (1)(c) of the Act direct the parties to refrain from the application or continuation of any business practice as described in paragraph (a) above, and to cease to have any interest in a business or type of business which applies to such a business practice or to derive any income therefrom and to refrain from at any time obtaining any interest in or deriving any income from a business or type of business applying such a business practice. |
This prohibition by the Minister will not apply should JCS Development (Pty) Ltd, trading as Leisure Club and Bishum Dwarika Maharaj or any employee, agent or representative of a business in which they have an interest, in the course of business, sell or offer for sale any type of timeshare or pooling scheme to the public or receive funds from potential timeshares or timeshare rights pooling schemes from buyers while complying with the conditions of full membership or associate membership of the Time Share Institute of South Africa.
LOUISE A TAGER
CHAIRMAN : BUSINESS PRACTICES COMMITTEE
22 April 1999